The goal of the proposed research is to test whether a long-term exercise program in sedentary veterans with diabetes will produce sustained improvement in mobility performance and physical activity. To facilitate adherence to a long-term program, we plan an individualized, home exercise/physical activity (PA) enhancement program with behavioral support. The rationale for this program is based on: 1) the feasibility of a previously funded VA RR&D controlled trial (led by the present research team) in sedentary older adults with diabetes that improved mobility performance, specifically usual gait speed; 2) the need for longer term and functionally-relevant interventions (specifically mobility-oriented) for older adult diabetics; 3) the potential to use telephonic nurse support to assist in overcoming barriers to exercise and in dealing with intercurrent illness, factors that are key in this comorbid patient group; and 4) the potential to increase the focus on objectively measured physical activity. In this proposed research, 240 sedentary older adult diabetics (aged 60 and over) will be randomly allocated into a customized, primarily home-based, functionally-oriented exercise program with nurse support intervention (I) group versus a flexibility and toning, health education control (C) group, and test outcomes in functional mobility and physical activity at 4 weeks, 6 months and one year. Primary Aim. Determine whether a home program improves mobility Hypothesis: In older adults with diabetes, a primarily home intervention consisting of functional exercise training and enhanced physical activity with nurse telephonic behavioral support will result in improved mobility performance at one year, compared to baseline and a flexibility and toning, health education control (C) group. Exploratory Aim: Determine whether a home program improves physical activity Hypothesis: Physical activity, as measured by weighted activity counts on actigraphy, will increase disproportionately from baseline to one year, in the I group as compared to the C group. This research can lead to an exercise/PA enhancement program that can coordinate with VA outreach programs, targeting older veterans who are not in the immediate vicinity of a major VA site. Ultimately, this should create a model to which physicians and other providers could refer comorbid diabetes patients.